People who worked hard to bring Fresh & Easy grocery stores to undeserved areas are sad the chain has decided to sell out. Tesco, the British owner of the grocery chain, is pulling the plug after years of poor sales. Ted Chen reports from Mid-City for the NBC4 News at 5 p.m. on April 17, 2013.
Fresh & Easy stores are now open to bidders who want to buy the 5-year-old grocery chain after its parent company, Tesco PLC, confirmed on Wednesday that it would end its operations in U.S.
The small self-serve mart had a tough 2007 debut just before the recession, and it struggled in the U.S. grocery market, competing with larger, more established stores like Costco, Wal-Mart and Whole Foods.
Philip Clarke, Tesco’s chief executive, said in a news release that a “strategic review” of Fresh & Easy, which began in December, confirmed the next step would be to cease operations.
“The consequences are non-cash write-offs relating to the United States, from which we today confirm our decision to exit,” Clarke said. “We have also faced external challenges which have affected our performance, notably in Europe and Korea.”
Fresh & Easy shoppers can breathe easy, though, as the chain does not plan to close any of its doors.
Tesco will attempt to sell the 200 stores in Arizona, California and Nevada as a single unit to prevent the loss of 5,000 jobs, but a buyer or price was not named.
"While we don't know yet who are new owner will ultimately be, Tesco has already received interest from a number of parties including groups looking to purchase Fresh & Easy as an operating business," the company stated in a message to customers.
The grocery chain’s run in the U.S. left Tesco -- one of the world’s largest retailers -- with a loss of $1.8 billion, which sent the company’s net profit down 96 percent to $183 million, the Associated Press reported.
Fresh & Easy stores were designed to be smaller than typical supermarkets with “easy-to-shop” aisles to make trips to the grocery store quick and convenient.
In January, Tesco was ordered to pay more than $800,000 to settle a lawsuit brought by prosecutors in San Diego and Riverside counties, who claimed Fresh & Easy charged higher prices than were posted on store shelves.
The British retailer -- which employs more than half a million people in Europe and Asia -- planned to focus more on its original customer market in the United Kingdom.